LinkedIn Wants Users to Connect More

Amid Threat From Rivals, Business-Networking Web Site Takes a Page from Facebook's Playbook

By

Scott Morrison

Updated Dec. 29, 2009 12:01 a.m. ET

If LinkedIn Corp. wants to avoid being swamped by social-networking giant Facebook Inc., it will have to convince users like Jackie Nejaime to log in more often they do now.

Ms. Nejaime, a San Francisco real-estate agent, uses LinkedIn to stay in touch with her 183-person network, check out job prospects and see if someone might be interested in one of the homes she's selling. But she typically logs in only a few times a month because she says the site lacks features.

"I would like to get more use out of it," said Ms. Nejaime "I just don't know how." By contrast, the 47-year-old says she uses Facebook every day to touch base with friends and professional contacts.

It is up to LinkedIn's chief executive, Jeff Weiner, to give people like Ms. Nejaime reasons to spend more time on LinkedIn, which is mostly used by professionals to post their resumes and by corporate recruiters looking for talent.

ENLARGE

LinkedIn CEO Jeff Weiner wants to give people reasons to spend more time on LinkedIn, which is primarily used by professionals to post resumes.
Dave Getzschman

Mr. Weiner, 39, a former senior executive at Yahoo Inc., took over LinkedIn a year ago with a mandate to reinvigorate the six-year-old business. While LinkedIn's membership has continued to surge, reaching 53.6 million at the end of November from 31.5 million a year ago, it has been dwarfed by Facebook, which has surpassed 350 million members.

More importantly, the amount of time people devote to LinkedIn is a fraction of the time people spend on some other social sites. Visitors spent about 13 minutes on average at LinkedIn during October, while Facebook users logged about 213 minutes and MySpace users spent 87 minutes, according to research firm comScore, which measured the behavior of global users 15 years and older.

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LinkedIn is "not really a community as much as a collection" of names, said Brigantine Advisors analyst Colin Gillis. "They are definitely in danger of losing the business-networking market."

While Facebook doesn't specifically target the professional market, hundreds of companies, such as Ernst & Young and EMC Corp., use the site to highlight their firms and recruit new candidates, said a Facebook spokeswoman. Special groups for lawyers, accountants, engineers, sales people and other professionals have cropped up all over Facebook as well.

One of Mr. Weiner's solutions is to take a page from Facebook's playbook. He recently opened LinkedIn's site to third-party developers so they can create applications that will draw professional users to the site when they aren't looking for work.

For example, software maker SAP AG has written an app that allows certified SAP developers to highlight their credentials by adding a "badge" to their LinkedIn profiles. A recently announced partnership with micro-blogging service Twitter Inc. enables LinkedIn members to link their Twitter accounts to their LinkedIn profiles.

LinkedIn expects other developers will target specific interest groups. For example, a developer might build an app that enables lawyers to highlight their case histories on their profiles. Unlike Facebook, which includes games, LinkedIn said all apps for its network must be professionally oriented. Submissions will be approved on a case by case basis.

"The more relevant those experiences the more likely our membership will be to engage in those experiences," said Mr. Weiner, adding that LinkedIn has already received requests from 1,500 developers for access to the site's programming interfaces.

Some analysts downplay the risk LinkedIn faces from sites like Facebook and highlight the recent growth the company has seen outside the U.S. market. Piper Jaffray analyst Gene Munster said the "clear delineation" between social and professional networking affords LinkedIn a fair degree of breathing room.

The privately-held company says it turns a profit from ads and recruitment services, though it won't disclose its profit or revenue. And while LinkedIn says it made "significant" infrastructure investments over the past year, it still has most of the $100 million it has so far raised from venture capital investors.

LinkedIn is also poised to announce a series of subscription "packages," specially priced memberships that provide not-yet-disclosed products and services designed for job hunters, small-business owners or other groups. The company didn't provide details, but suggested that some new third-party apps might only be available to premium subscribers.

Other partnerships are aimed at making LinkedIn more useful when members are working outside the network. For example, Microsoft Corp.'s upcoming version of Outlook will allow users to see people's LinkedIn profiles when they are sending or receiving. Overlapping users will be able to sync their Outlook and LinkedIn contact lists, as well as use Outlook to expand their LinkedIn networks.

Mr. Weiner acknowledges that driving membership growth, while at the same time increasing the number of apps they can use to communicate with each other, poses significant challenges. Key among them is to develop the right privacy tools so users can control who they share information with. Another challenge is to ensure that users aren't overwhelmed by a blizzard of irrelevant content.

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